Air cargo pricing index 12 weeks away

In the next six to 12 weeks, John Peyton Burnett of Kong Team Logistics and Robert Frei of JCL Logistics will launch an index of air-cargo rates, the TAC Index.
The index, which will be compiled through information submitted by forwarders, will initially focus on key air cargo trading lanes out of Hong Kong. A subscription service, Burnett told American Shipper it will be useful to shippers, airlines and forwarders, but also investors and financial analysts. The index, he said, is modeled after the Shanghai Containerized Freight Index, but when first unveiled will be on a much simpler scale.
Burnett said one of the main benefits for shipper users will be price negotiation because the TAC Index will serve as a benchmark.
“At present, the large air cargo shippers request a handful of approved forwarders to submit bids on a regular basis. The main purpose of this exercise is price discovery,” he said, adding that the process takes a long time.
“An index,” he continued, “can make the market more efficient by removing this price discovery component. Parties can then focus their efforts on other issues such as service. For example, some parties might be willing to procure capacity at a higher than market price, but they expect a better level of service.
Burnett said he and Frei had been working separately toward an index like this for about 10 years, but IT advancements mean that the dream is now quickly becoming a reality.